NSW election results: Labor sweats on possibility of minority government as jostle for Liberal leadership begins

The rival left and right factions of the New South Wales Liberals look set to face off in a contest over who becomes the state’s next opposition leader, as the incoming Labor government sweats on a handful of undecided seats to see whether it will govern in a majority.

As counting resumed on Monday, Labor’s chances of forming majority government in the new parliament were in the balance after the inclusion of pre-poll votes saw it fall behind in the seat of Terrigal on the state’s central coast.

While Labor’s incoming treasurer, Daniel Mookhey, announced the party would swear in an interim cabinet on Tuesday, it remained two seats short of a majority. It could mean the incoming premier, Chris Minns, would be forced into bargaining with an eclectic bloc of crossbench MPs, with demands ranging from gambling reform to feral horse culls.

At the same time, key Liberals were still coming to terms with the end of 12 years of conservative government in the state after Saturday’s election loss, with a handful of MPs jockeying to replace the outgoing premier, Dominic Perrottet, as the party’s leader.

The outgoing attorney general, Mark Speakman, released a statement saying he would hold discussions with colleagues to “ensure that we have a strong, refreshed and energised team” to hold the new Labor government “accountable in the interests of the people”.

“I’ll have more to say shortly,” he said in the statement.

Speakman, who held senior ministerial positions in both the Perrottet and Berejiklian governments, is the most likely contender from the party’s moderate faction after the outgoing treasurer, Matt Kean, declared he would not run for the position on Monday.

Seen as capable but cautious, Speakman would probably to face competition in the form of fellow former ministers Anthony Roberts or Alister Henskens.

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Both are from the party’s right faction and could face pushback from the dominant moderates.

“It won’t be Roberts,” was one senior moderate’s blunt assessment on Monday.

The party received some good news on Monday, with preference counts saving Tim James in the seat of Willoughby after independent Larissa Penn appeared set to take the seat.

Adam Crouch also regained the lead from Labor’s candidate in Terrigal, after a swing of more than 12% away from the Liberals.

With a glut of seats still close to call, Labor was sweating on results in Kiama, Ryde, and Terrigal. By Monday afternoon it had won 45 seats, meaning it needed to win at least two of those three to reach the 47 needed to form a majority government.

However, a number of other seats remained in doubt. In the electorate of Miranda, in Sydney’s Sutherland shire, the Liberal MP Eleni Petinos was ahead of Labor’s Simon Earle by only 71 votes, after suffering a 14% swing against her.

In the seat of Goulburn in the state’s south, outgoing minister Wendy Tuckerman was ahead by about 300 votes.

Whether Labor wins majority could have a significant impact on the incoming government’s agenda.

Related: The Liberal brand is tarnished. Some hard truths must be faced in the wake of another election loss | Trent Zimmerman

Minns repeatedly ruled out formal deals with the crossbench during the election, but may be forced to bargain with a mishmash of independents and minor parties potentially able to wield significant influence in the new parliament.

Regardless though, Minns will be sworn in as the state’s 47th premier along with an interim cabinet made up of members of his senior leadership team on Tuesday.

Mookhey will be the first Australian minister to be sworn in on the Bhagavad Gita, a holy scripture of Hinduism.

The interim cabinet will be made up of Minns, Mookhey, Penny Sharpe in the environment portfolio, Jo Haylen in transport, Ryan Park in health and John Graham as the special minister of state.

On Monday, Mookhey said the wider ministry would probably be sworn in next week.

“As a result, tomorrow there will be a Labor government formed in NSW constitutionally,” he said.

“It will allow us to have access to the public service and to get the briefings by departments. It will formally bring an end to the caretaker conventions, is the other point here, which will allow decision making to resume in NSW.”